Pig butchering is a type of cyber scam that originated in China.

As the
name suggests, the victims are identified and fattened up financially
before being robbed, just the way pigs are plumped up, before
slaughter. In China, this crime is known by the Chinese version of the
phrase shāzhūpán. Laos, Myanmar and Cambodia are epicentres of this
scam.
Pig butchering scams are executed online using social media and the
targets are mostly well qualified and ambitious people. The scammers
have an impressive lifestyle and keep their profile public to woo many
victims. These scams are centred around crypto and other online trading
tools. As cryptocurrency transactions happen in unregulated virtual
space, scammers can withdraw money without trail from anywhere in the
world and convert their stolen cryptos into fiat on unregulated
exchanges, like Huobi.

Pig butchering starts online with a random message, chat or friend

request to several people. This is how scammers cast their net far and
wide. The whole scam hinges on digital relationships. By using social
engineering the scammers learn about the lifestyle and the likes and
dislikes of their potential targets. Then they connect through paid
premium social media accounts to appear authentic. They connect
regularly to nurture the relationship with the potential target. The
relationship could be personal, platonic, professional, business or
spiritual. The scammers indulge in several rounds of normal conversation
and in fact, they walk miles with their prey. The goal is to win the trust
and confidence of the victim by methodical brainwashing. It may take
many weeks for “fattening up” the prey. Most of the times these
scammers are also victims.

Victims aren't just vulnerable or elderly — many young, tech-savvy

professionals fall prey to this insidious scheme. In most of the cases, the
victims are over ambitious people aspiring for high growth and positions
in the career. Next, the scammer broaches about making money casually
and flaunts his lavish lifestyle. This stimulates curiosity in the target and
soon, the scammer gets his target set up a malicious app or web
platform that appears genuine. The target is made to witness a curated
real-time market data that shows great returns. The target then infuses
funds into the app anticipating such returns. The scammers let the
target watch his investment grow and even pay out dividends for a
while, just like it is done in Ponzi schemes. Gradually, when the target’s
corpus gets fattened up, the scammer vanishes with the app. The app is
attacker controlled and hence, the growth shown in the app is also
bogus. In the backend, the scammers ensure that the entire money
invested through this bogus app reaches their personal crypto wallet.
Scammers often allay initial doubts by letting targets withdraw money
once or twice to convince them the process is trustworthy. (Source :
Explained: The Rise of Pig Butchering Scams, by Satnam Narang in
https://www.indiatimes.com/explainers/news/the-rise-of-pig-butchering-
scams-584184.html dated Nov 09, 2022). Just when things appear to be
a smooth sail, the scammers start their game gradually. They insist on
additional investment from the target and keep blowing up the balloon.
These scammers are accurate in assessing the elasticity and the capacity
of their targets. They wait until the balloon can no longer be inflated and
then disappear in a jiffy. The movie called “The tinder swindler” is an
example of butchering scam based on real frauds perpetrated by the
fraudster. The scam is perpetrated over a period of time in 6- 8 steps as
under:

1. Create a fake identity

2. Character-building

3. Rapport-building

4. The ask

5. The quick win

6. The disappearance

These scams originated during lockdown and now flourish with many
employees on board. What’s appalling is the nexus between pig
butchering scams and human trafficking. There are cybercrime dens that
deploy trafficked people from developing nations to perpetrate these
scams. The trafficked victims do not have a clue until they “go live”. They
are given well crafted playbooks (job cards) that have customised scripts
for different victims like millennials, single parents, aged and lone wolves
etc. The script is so natural that victims are bound to get floored.
(Source:How India's IT professionals got trapped in Myanmar, Cambodia’s
cybercrime dens, By MANOJ SHARMA, Oct 20, 202 for fortuneindia.com)

Further, bit coin ATMs are also used by scammers to usurp money from
victims. In many cases, the victims are “repeat customers”. After a victim
has lost all his assets, he is contacted by another department of the
butchering syndicate that offers recovery (of lost money) services for a
fee. To undo his stupidity, the victim signs up for the service, thus, getting
trapped again. (Source: How This Prosecutor Is Spearheading the Fight
Against Crypto ‘Pig Butchering’ Scams - Ep. 455 – podcast unchained by
Erin West Deputy District County, Santa Clara County)

Example of a pig butchering scam

One of the victims was recruited for a high paying “Remote Business
Development Role” . The job boasted of no layers between the manager
and the CEO. The target was quickly elevated to a superior role and was
given stiff target for onboarding clients to their financial app. The
manager was first asked to learn and experiment using the said app so
that he can demonstrate the same to his potential clients. He invested
some amount using the app and was astonished to get gravity defying
returns. Not only did he invest his entire savings, but also marketed the
app among his circle. Soon, he had onboarded a dozen clients and all of
them were able to see their corpus multiply. He also borrowed loan
based on his salary for more investment into this. This way he was full of
debts and anxiety, too. A small slip in the return would make him antsy
and during one such dip, he felt he should downsize his corpus. He
requested for liquidating his investments and then, the cookie began to
crumble.
 His request was flatly declined.
 He was told that it was mandatory to hold on for a longer
tenor for better returns.
  On persistent requests, the company asked for further
money citing taxation and other offshore compliance
requirements.
 At one point, he had to admit that he could no longer
pump in funds towards liquidation charges and was ready
to incur loss to get back his investment. He sent a long mail
and he never heard back.
 Mails, phone calls, messages on social media and VoIP calls
went unanswered.
 The “so called CEO” disappeared and the app stopped
functioning.
By the time, the victim realizes it’s too late. Many such bogus apps/sites
were caught and frozen by LEAs, in the US. The list of domains seized
includes simexcbr.com, simexlua.com, simexwim.com, simexarts.com,
simexrue.com, simexvtn.com, and simexbiz.com, all of them spoofing the
one used by the Singapore International Monetary Exchange (SIMEX)
(Source: https://www.bleepingcomputer.com/news/security/us-govt-
seizes-domains-used-in-pig-butchering-scams)

A screenshot of one of the seized domains :

Other butchering scams

” Bird butchering scam” refers to scammers who approach their targets

via social media platforms or instant messaging apps (such as, WeChat) to
promote working opportunities that offer returns in a short period of
time. The targets will be lured into making credit card payments or
others. In actuality, the lucrative returns will never materialize after the
fraudster gets the money or financial information from the victims.
Targets
"Birds“ refer to people who always stay at home like a “caged bird”, like
housewives, geeks, etc. who have little social contact, but like to earn
through the Internet.

4 Steps in Bird Butchering

1) Buying bait Scammers buy some personal information.

2) Hanging bird nets : The scammers put up false ads on various platforms
to snare "birds”. Once the birds are trapped, they brainwash them like it
is done in any other butchering scam.
3) Feeding birds
After preying on the victims, scammers send some income to sweeten the
deal and earn trust. This also keeps the birds in the cage for quite some
time.
4) Kill
At one point, the birds start smelling danger and they refuse to give in
further. This is when the scammers instil fear and blackmail the birds. The
last step in any butchering scam is to scare the victims and pressurise
them into investing more, to offset the losses already incurred. When the
victims yield to this, the scammers decamp with the loot.

Fish butchering scam

” Fish butchering scam” is a form of telecommunications fraud. Scammers
go to shopping platforms that allow both buying and selling like olx etc.
They study patterns of their target and lure them by some or the other
means. They are asked to contact them (scammers) privately and then
tricked into paying for fraudulent transactions. The process of cheating
the victim is called "fish kill". The scam operator is called a "fisherman".
And finally, the person making the fake link to the victims, is called a
"captain".
Killing fish plate also refers to "credit card withdrawal, loan frauds",
where scammers advertise on the internet that they can increase credit
card limits or improve credit scores.(Source: Dapeng Education Three
Steps to Teach You to Spot the "Kill Fish Plate" Scam! _Fish (sohu.com)
BUTCHERING SCAMS AND AML
Astoundingly, pig butchering does not appear to be slowing down, in
spite of growing vigilance because it is both a financial and an emotional
scam. With their emotions compromised, it is difficult for victims to
recognize the dubious investment and to back out when they feel
something is not right.
The regulatory response
While individuals can exercise due diligence when interacting with
anyone online, there is only so much they can do. It’s the role of the
government to root out these pig-butchering schemes. As there are
multiple countries on the butcher’s block, a roadmap with synergy among
the nations is the need of the hour.
At the global level, there has not been a unified approach to combat this.
The closest was an international operation from Interpol from March to
May 2022 that targeted operators of social engineering scams in 76
countries, including those who perpetrated romance scams. Preventing
scammers from accessing stolen funds may be the best deterrent of all:
scammers may not want to slaughter pigs if there is nothing left to
eat. (SOURCE: Merkle Science Feb 20, 2023 )
AML checks in social media
It is high time that the world comes together and formulates regulation
for checking crimes perpetrated online. Open AI and social media are
playgrounds without fence for criminals. The owners of social media sites
should develop a penalty clause/mechanism (defame in public forum etc.)
to punish the fraudsters and block them permanently. This would instil
some fear in the masterminds.

Role of Banks/FIs

Banks/FIs can be more effective in stopping scams, if they invest in

technology building and training. Possible pointers are as under:

Monitor customers’ transactional geography

Banks can use technology to identify potential butchering or trafficking by

analyzing the transactions. First overseas/crypto investment can be
considered as a red flag and appropriate due diligence to be applied on
such encounters.

Use cross-referencing to know your customers

Financial institutions can also look into change in the customer is

behaviour or lifestyle over time. Does their recent behavior match their
expected behaviour from their KYC/CDD review? If yes, deeper
monitoring and EDD measures to be applied.

Review databases of known trafficking perpetrators

Anti-money laundering solutions should not only screen for watchlist

names, but also for human trafficking awareness. There are many
databases of human trafficking perpetrators and victims. These lists to be
used as internal negative list or for screening purposes. Third-party
providers maintain lists of both traffickers and victims, and bank
personnel should be trained to recognize relationships between them.

Upgrade onboarding and ongoing monitoring

Banks/FIs should embrace perpetual Know Your Customer (pKYC). Using

pKYC, banks can identify when a person’s risk level has changed and
immediately investigate instead of waiting for red flags to spot
ML. Monitoring how the customer’s behavior has altered over time is a
key step in using anti-money laundering solutions to stop human
trafficking.

Butchering scams hinge upon psychological grooming of the victim. The

only way to fight these scams is to stay vigilant and spread awareness on
the typologies of these scams. This might ring a bell in the heads of
potential victims. Unfortunately, the chances of recovery of the stolen
money from scammers slim to none.

The Bottom Line: Don’t End Up on the Butcher’s Block

 Don’t send money, trade, or invest with a person you have only met
online.
 Don’t speak of your financial position or investments.
 Don’t share personal information or current financial status with
strangers.
 Don’t provide your banking information, social security number,
copies of your identification or passport, or any other sensitive
information to anyone online or to a site that you cannot verify is
authentic.
 If an online investment or trading site promotes unbelievable
profits, it is most likely just that—unbelievable.
 Be cautious of individuals who claim to have exclusive investment
opportunities and urge you to act fast.